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19 July 2011 early edition/transcript/Part 2
Part 2 TOM WATSON: Mr Murdoch senior, good afternoon, sir. You have repeatedly stated that News Corp has zero tolerance to wrongdoing by employees. Is that right? RUPERT MURDOCH: Yes. WATSON: In October 2010, did you still believe it to be true when you made your Thatcher speech and you said, "Let me be clear: we will vigorously pursue the truth—and we will not tolerate wrongdoing"? RUPERT: Yes. WATSON: So if you were not lying then, somebody lied to you. Who was it? RUPERT: I don't know. That is what the police are investigating, and we are helping them with. WATSON: But you acknowledge that you were misled. RUPERT: Clearly. WATSON: Can I take you back to 2003? Are you aware that in March of that year, Rebekah Brooks gave evidence to this Committee admitting paying police? RUPERT: I am now aware of that. I was not aware at the time. I am also aware that she amended that considerably, very quickly afterwards. WATSON: I think that she amended it seven or eight years afterwards. RUPERT: Oh, I'm sorry. WATSON: Did you or anyone else at your organisation investigate this at the time? RUPERT: No. WATSON: Can you explain why? MURDOCH: I didn't know of it, I'm sorry. Allow me to say something? This is not an excuse. Maybe it is an explanation of my laxity. The News of the World is less than 1% of our company. I employ 53,000 people around the world who are proud and great and ethical and distinguished people—professionals in their line. Perhaps I am spread watching and appointing people whom I trust to run those divisions. WATSON: Mr Murdoch, I do accept that you have many distinguished people who work for your company. You are ultimately responsible for the corporate governance of News Corp, so what I am trying to establish is who knew about wrongdoing and what was involved at the time. If I can take you forward to 2006: when Clive Goodman was arrested and subsequently convicted of intercepting voicemails, were you made aware of that? RUPERT: I think so. I was certainly made aware of when they were convicted. WATSON: What did News International do subsequent to the arrest of Clive Goodman and Glenn Mulcaire to get to the facts? RUPERT: We worked with the police on further investigation and eventually we appointed—very quickly appointed—a very leading firm of lawyers in the City to investigate it further. JAMES MURDOCH: Perhaps I can help here— WATSON: I will come to you in a minute, sir. Just let me finish my line of questioning and then I will come to you. What did you personally do to investigate that after Mr Goodman went to prison? You were obviously concerned about it. RUPERT: I spoke to Mr Hinton who told me about it. WATSON: Okay. In 2008, another two years, why did you not dismiss News of the World chief reporter Neville Thurlbeck, following the Mosley case? RUPERT: I had never heard of him. WATSON: Okay. Despite a judge making clear that Thurlbeck set out to blame two of the women involved? RUPERT: I didn't hear that. WATSON: A judge made it clear Thurlbeck set out to blackmail two of the women involved in the case. RUPERT: That is the first I have heard of that. WATSON: So none of your UK staff drew your attention to this serious wrongdoing, even though the case received widespread media attention? RUPERT: I think my son can perhaps answer that in more detail. He was a lot closer to it. WATSON: I'll come to your son in a minute. Despite the fact that blackmail can result in a 14-year prison sentence, nobody in your UK company brought this fact to your attention? RUPERT: The blackmail charge, no. WATSON: Do you think that might be because they knew you would think nothing of it? RUPERT: No. I don't- I can't answer. I don't know. WATSON: Do you agree with Mister Justice Eady when he said that the lack of action discloses a remarkable state of affairs at News International? RUPERT: No. WATSON: Mister Murdoch, a judge found a chief reporter guilty of blackmail. It was widely reported. He says it was a remarkable state of affairs. RUPERT: Why didn't he put him in jail? WATSON: `Cause it was a civil case. RUPERT: SHRUGS WATSON: Were you aware that News International commissioned an investigation into News International emails by Harbottle & Lewis? RUPERT: Was I…? WATSON: Aware that News International commissioned an investigation into News International emails by the solicitors firm Harbottle & Lewis? RUPERT: Yes. I didn't appoint them, but I told of it happening. WATSON: You claimed in the Wall Street Journal that Harbottle & Lewis had made a major mistake. Can I ask what mistake you were referring to? RUPERT: I think maybe that's a question, again, for James, but there were certainly, when we examined it- reexamined that, we found things which we immediately went to counsel with to get advise on how to present it to the police. WATSON: In their written response to this committee's questions are you aware that News International stated that both John Chapman and Daniel Cloke reviewed these emails before forwarding them to Harbottle and Lewis? RUPERT: No. WATSON: So nobody in the company told you that two of your executives had reviewed the emails? RUPERT: I was under the understanding that everything had been sent to them. WATSON: OK. You are aware that Lord Macdonald QC has since reviewed the emails again on behalf of News International, are you not? RUPERT: Yes – and he's reported them to the whole board of News Corporation. WATSON: And you're aware that he's stated to the board he found evidence of indirect hacking, breaches of national security and evidence of serious crime in the Harbottle and Lewis file. RUPERT: He did indeed. JAMES: Mister Watson please, I can address these in some detail if you would allow me. WATSON: I will come back to you Mister Murdoch but it's your father who's responsible for corporate governance so I would like to ask what he knew. I will come back to you. Who was aware of Harbottle and Lewis's findings at News International? RUPERT: It went to the senior officials of News Corp, certainly the top legal officer. WATSON: So, Tom Crone or Les Hinton? RUPERT: No. They were not top legal officers WATSON: Who were the top legal officers? RUPERT: You can answer that. JAMES: Chapman was the top legal officer at News International and Mister Crone was the head of legal affairs at News Group newspapers. WATSON: And were you informed of the findings by your son, Mister Murdoch? Or by Rebekah Brooks? RUPERT: I forget, but I expect it was my son. I was in daily contact with them both. WATSON: When were informed about the payments made to Gordon Taylor and Max Clifford? RUPERT: Nope WATSON: You were not informed? RUPERT: Nope. WATSON: At no point you knew that Taylor and Clifford were made payments? RUPERT: I've never heard of them - the first one. WATSON: Ok. You never informed the chief executive of News Corp that you authorised payment of half a million pounds... JAMES: Will you let me answer the questions now Mister Watson? WATSON: I'd like you to tell me whether you informed your father that you had authorised payments to Gordon Taylor as result of him being a victim of a crime? JAMES: The settlement with Mr Taylor, and I am happy to address the matter of Mr Taylor in some detail if you would like. My father became aware after the settlement was made in 2009 I believe after the confidential settlement had become public as a newspaper reported on the out-of court settlement afterwards but please understand that an out-of court settlement of a civil claim of that nature and of that quantum is something that normally in a company of our size, the responsible executives in the territory or the country would be authorised to make and that's the way the company is functioned and it's below the approval thresholds if you will, that would have to go to my father as chairman and chief executive of a global company. WATSON: There are other questions that I could ask you on this but there other colleagues that have specific questions for you Mister Murdoch about this issue so I'll move back to you father if I can. Mister Murdoch, at what point did you find out that criminality was endemic at the News of the World? RUPERT: Endemic is a very hard...is a very wide ranging word and I also have to be very careful not to prejudice the course of justice that is taking place now. That, that has been disclosed I became aware as it became apparent. The first two, then I was absolutely shocked, appalled and ashamed when I heard about the Milly Dowler case, only two weeks ago. Eight days before I saw them. I was graciously received by the Dowlers. WATSON: Did you read our last report into the matter where we referred to the collective amnesia of your executives who gave evidence to our committtee? RUPERT: I haven't heard that, but... WATSON: Nobody brought it to your attention? RUPERT: I don't know who made that particular charge. WATSON: A parliamentary enquiry found your senior executives in the UK guilty of collective amnesia and nobody brought that to your attention? RM shakes head: No WATSON: I don't see why you think that's not very serious. RUPERT: Yes, but you're really not saying amnesia. You would be saying lying. WATSON: Well we found your executives guilty of collective amnesia. I would have thought someone would like to bring that to your attention. That it would concern you. Did they forget? RUPERT: No. WATSON: Ok. Whilst it has been obvious to most observers since the summer of 2009 that phone hacking was wide spread, you knew from January of this year that the one rogue reporter line was false. Is that right? RUPERT: I forget the date WATSON: Why was Edmondson the only person to leave News of the World last January? RUPERT: Mr Watson, we have given all our files, all our knowledge and everything to the the police. They have not given us the Mulcaire diaries so we do not know what was in that but there was a page which appeared to be addressed to him. Again that's my son's... JAMES: Mr Watson and Mister chairman, perhaps it would be helpful to the committee if you would like to go through any of the particular details around why certain decisions were made by the management team at News International and the precise chronology. It would be more helpful perhaps if I could answer those questions as the chief executive of the regional businesses across Europe. I have somewhat more proximity to it. WATSON: I understand the detail points Mr Murdoch... JAMES: I'm simply offering to help, to clarify these matters. WATSON: But your father is responsible for corporate governance and serious wrongdoing has been brought about in the company and it is revealing in itself what he doesn't know and what executives chose not to tell him. So with respect to you I will persue my line of questioning and come back to you later. WATSON: (to RM) Mr Murdoch, why was no-one fired in April when News International finally admitted that News of the World had been engaged in criminal interception of voice-mails? RUPERT: It was not our job to get in the course of justice, it was up to the police to bring those charges and carry out their investigation which we were 100 per cent co-operating with. WATSON: But in April the company admitted liability for phone-hacking and nobody took responsibility for it then. (pause) No one was fired, the company admitted that they'd been involved in criminal wrongdoing and no-one was fired. Why was that? RUPERT: There were people in the company that apparently were guilty and we have to find them and we have to deal with them appropriately. JAMES: Mr Watson, if I can clarify, most of the individuals involved or implicated in the allegations had long since left the company. Some that were still there, you mentioned one, exited the business as soon as evidence of wrongdoing was found and a process was set up in co-operation with the police to aid them with any of those things that they wanted to do. But many of the individuals that were potentially implicated in those civil litigations and potentially in these criminal matters had already left the building and were not in the News of the World at this time and current News of the World - our News of the World executives and journalists at the time who many were not there in 2006 and 2007. So some of them had already left. WATSON: Thank you. JAMES: You're welcome. WATSON: Mr Murdoch, why did you decide to risk the jobs of 200 people before pointing the finger at those responsible for running the company at the time of the illegality - your son and Rebekah Brooks? RUPERT: When a company closes down it is natural for people to lose their jobs. We have in this case, and it is continuing, every effort to see that those people are employed in other divisions of the company...if they are not part of the small group, or whatever group, I'm not sure how big the group is.. involved in criminality. WATSON: Did you close the paper down because of the criminality? RUPERT: Yes, we felt ashamed at what had happened and thought we'd bring it to a close. WATSON: People lied to you and lied to their readers. RUPERT: We had broken our trust with our readers. The important point was that we had broken our trust with our readers. WATSON: Are you aware that there were other illicit forms of surveillance being used by private investigators that were used by News International? RUPERT: Other forms of? WATSON: Illicit surveillance. Computer Hacking. RUPERT: No. WATSON: Tracking on cars... RUPERT: No. WATSON: If any evidence is produced... RUPERT: I think all news organisations have used private detectives and do so in their investigations from time to time. I don't think illegally. WATSON: If it could be shown to you that private investigators working for newspapers in News International used other forms of illicit surveillance like computer hacking, would you immediately introduce another investigation? RUPERT: Yes, that could be up to the police but we would certainly work with the police. If they wanted us to do it we would do, if they wanted to do it they would do it. WATSON: Finally can I first ask you when did you first meet Mister Alex Marunchak? RUPERT: Mister? WATSON: Alex Marunchak. RUPERT: I don't think I've ever... WATSON: He worked for the company for 25 years. Started as a primary... RUPERT: I don't remember meeting him. I might have shook his hand walking through the office but I have don't have any memory. WATSON: Ok, thank you. WHITTINGDALE: Thank you.